PAPER CURRENCY.

Tuapeka Times, Volume 42, Issue I, 28 November 1868, Page 3

PAPER CURRENCY.

(To the Editor of the I'uapeka Times.) Srn, — 1 4mve had some difficulty in forming an enquiry with a view to learn what you propose in your leader of the 14th instant, from the fact that you do not appear to mo to enunciate jany principle, or indicate any course of action jn your project ( of remunerating ithe squatters^ "the holders of wnsto jlands of tlie Crown under uncertain conditions," by means of a 'paper currency, instead of paying them in gold. Your observations are chiefly remarkable, from the ground that you appear to take, that gold — "dross," you say, is of less value than iron, copper, tin, &c, &c. The resources of the colony must be developed by the encouragement of men of capital to settle in the country, as well as by the encouragement of men who can labour to immigrate hither. There is, no ' doubt, great reason to complain, when men who have accumulated capital in the country — I refer at present especially to the gold mining population — are obliged io leave the province from the impossibility of buying land on which to settle; and I entirely agree with you that infinite mischief has been done, and is doing, by tlie lands in the vicinity of the goldficlds being shut up ; but how this evil is to be remedied by the substitution of gold for paper I cannot understand. Tn,ere is, of course, no doubt that the large transactions in the commerce of the world are carried on by " bills of exchange " under various names : that is to say that great merchants interchange the products of tho industry of mankind by barter, without "the intervention of the precious metals, as money ; but an enormous trade is carried on in precious metals themselves. In this province a very largo, if not the greatest, proportion of the commodities useful and agreeable to us are paid for by gold, not as money, but as a product of our industry, drawn upon by said bills of exchange exactly in the same way as if it were wool or corn. The reason that gold is adopted as the ultimate standard of value by England, the wealthiest country in the world, is simply that, from its (the gold's) rarity, beauty, and wonderful adaptability to the pi-oduction and ornamentation of articles of luxury, it is the most • valuable article in tlie world, especially regard being had to its portability in the form of coin. The gems, waicii would excel gold in rhs qualities of rarity and beauty (?), can suffer no change of form without a great diminution in their value, while the inferior metals, from their small value as articles of trade, are inconvenienr for tlie ultimate settlement of largo transactions, as well as for the personal requirements of wealthy men as money. I suppose' that in one's visit to a goldfield one need not apologise for being rather enthusiastic in praise uf the staple commodity. Some people may be inclined to laugh, but I really believe, and many much better instructed men than I am believe also, that gold could do the work of the socalled baaor metals better than they can, and that if it were not for its real intrinsic value it would be so employed. A sort of panic arose some years ago when the American and Australian discoveries of gold were announced, that the currency of groat Britain, and every other place where tlie pound sterling was adopted as the standard of value, would be disastrously affected by the reduction in the value of gold ; bub no one has ventured to say positively that such effect has been produced, the faat being that the surplus gold ia consumed, at its market value, in the arts. An eminent statist informed me the other day that 400,000 ounces of gold were consumed in gilding, &c. ; what must it be in Great Britain? what must be the whole amount consumed in the world ? Such of your readers as are not addicted to tho study of political economy, or conversant with its phraseology, may require to bo informed that a thing is said to b 8 consumed when ifc is used up, as food and raiment are consumed to keep our lieahy tabernaclo iv repair. I s hound like to learn from you- what you mean by "proposing to pay off the squatters whose land is required by paper currency, instead of, tho oldfasnionod dros3 called, gold. I agree with you" entirely that the land must be opened whore required for settlement;*'also that those who have expended capjtal on tfio waste land 3 must bo compensated for their butl ty, but how this is to. bo managed by paper,- ' currency as opposed to gold I am at a losa to discover. — I am, &c, A.H. :